Atlanta Mayor Kasim Reed is urging the board chairman of home finance giant Fannie Mae to resign over a controversial deal that could allow the developer to buy up control over city housing authority land at a fraction of its value.
Reed's blistering letter to Integral Group co-founder and CEO Egbert Perry questions the developer's integrity and judgement over the deal with Atlanta Housing Authority, the city's housing agency for the poor. The agreement gave Integral options to purchase control over an estimated 100 acres of vacant land at what could be a massive discount, with no promise that he would build affordable housing, a March Atlanta Journal-Constitution investigation found.
"Forcing AHA to give up land slated to serve Atlanta's low-income population in a sale benefiting only your entities while burdening generations of Atlanta residents, is unlawful, unethical and untenable for anyone, much less the Chairman of the Fannie Mae Board," said the letter, dated Monday.
Perry declined comment through a spokeswoman. Fannie Mae did not immediately respond to requests for comment.
The deal was cut in 2011 under former AHA CEO Renee Glover, who now also serves on Fannie Mae's board of directors. Perry informed AHA's current head Catherine Buell of his intent to exercise his options late last year. Perry told the AJC previously that he intends to build market rate housing on the sites.
Atlanta currently faces an affordable housing crisis, which Reed said is a priority for his administration. The letter ratchets up pressure against Integral. AHA filed suit in September to get out of the deal, which calculated the sale values based in part on real estate values from years ago. Local grassroots activists demonstrated against Perry at a speaking engagement.
AHA estimates Integral Group would gain control over $138 million worth of property for about $17 million, but an Integral spokeswoman previously told the AJC that these values are impossible to know because no formal appraisal has been completed.
AHA board members who served at the time of the deal told the AJC that they did not approve the options, and there is no evidence in U.S. Housing and Urban Development documents obtained by the AJC through a Freedom of Information Act request of a 2011 approval.
In the letter, Reed argued that Perry's position on Fannie Mae's board threw the mortgage finance giant reputation into question and are in conflict with its corporate governance guidelines. He also said that Perry's decision to publicly call members of AHA's board "clowns" reflected poorly on the developer's values.
"Americans deserve national leadership it can trust," Reed states. "Fannie Mae's integrity suffers every day you remain at its helm."
Integral Group partnered with the Atlanta Housing Authority for decades under the leadership of former head Glover to demolish its public housing projects and build new, mixed-income housing on the sites. Backers praised their work as a national model.
The vacant land is located at the former Carver, Capitol, Grady, and Harris public housing projects, where land values have climbed since the early 2000s. They have nearly doubled at the Grady and Capitol sites, which are in gentrifying in-town neighborhoods, the AJC investigation found.
Glover joined Perry on Fannie Mae's board of directors in 2016.
Perry joined Fannie Mae's board of directors in late 2008 and has been chairman since 2014.
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